Published: 2018-02-22 19:28:49 CET
Eimskipafélag Íslands hf.
Financial Statement Release

2017 was a year of growth for Eimskip

EBITDA forecast for the year 2018 EUR 60 to 65 million

  •   Revenue EUR 664.0 million, up by EUR 150.1 million or 29.2% from 2016
    • Volume in liner services up 3.6%; Liner revenue up EUR 58.1 million or 15.3%
    • Volume in forwarding services up by 41.2%; Forwarding revenue up EUR 91.9 million or 68.8%, of which EUR 73.2 million came from new acquisitions
  • EBITDA EUR 57.2 million, up by EUR 3.7 million or 7.0% from 2016
  • Net earnings EUR 16.8 million compared to EUR 21.9 million in 2016
    • Mainly reflecting adverse currency exchange fluctuations of EUR 5.8 million
  • Equity ratio 53.2% and net debt EUR 102.8 million at year-end
  • The Board proposes a dividend payment of ISK 6.80 per share, a total of about EUR 10.2 million

Gylfi Sigfússon, President and CEO

“The year 2017 can be described as “the year of growth” for Eimskip, where volume, revenue and EBITDA were record high. The year was great for the forwarding segment, with new companies added to the group and solid organic growth. The company faced some operational challenges in the liner segment, like the fishermen strike at the beginning of the year and the volume imbalance between imports and exports in Iceland that reached an all-time high, negatively affecting the EBITDA margin.

Revenue 2017 increased to EUR 664.0 million, up EUR 150.1 million or 29.2% from the previous year. The increase came from the new acquisitions, volume growth and increased international freight rates. The EBITDA for the year was EUR 57.2 million, up by 7.0%. Net earnings for the year amounted to EUR 16.8 million compared to EUR 21.9 million in 2016, or down by EUR 5.1 million, mainly reflecting adverse currency exchange fluctuations year-on-year of EUR 5.8 million.

The liner services revenue for the year was EUR 438.4 million, up 15.3%. The volume in the North Atlantic liner system grew by 3.6%. There was good growth in imported volume to Iceland and Trans-Atlantic volumes during the year, while there was some reduction in export volumes from Iceland and the Faroe Islands. EBITDA from the liner services was EUR 39.5 million compared to EUR 42.4 million in 2016. The fishermen strike and the imbalance cost for the first half of the year negatively affected the EBITDA by EUR 2.6 million. Non-recurring charges of EUR 0.8 million were due to a fine imposed by the Financial Supervisory Authority in Iceland and costs related to acquisition projects. A non-recurring revenue of EUR 2.5 million related to a restructuring project in Asia was included in the fourth quarter.

The forwarding segment had a strong year, with revenue of EUR 225.6 million, up by 68.8% from the previous year. Our existing business grew by EUR 18.7 million or 14.0% and the recently acquired companies, Extraco, Mareco and SHIP-LOG, generated EUR 73.2 million increase in revenue. Volume in the forwarding services was up by 41.2% from 2016 volumes, 29.2% came from the new acquisitions and 12.0% was organic growth. EBITDA from forwarding was EUR 17.7 million for the year, up by EUR 6.6 million or 60.1%. EBITDA from the new group companies was EUR 5.1 million. These acquisitions have created accretive value for the group. The integration of the acquisitions creates a more powerful network and growth opportunities through new commodities, new trade lanes, cross selling and synergies. The company has also achieved other goals with the acquisitions by increasing the proportion of asset-light EBITDA, generating higher return on capital and geographically diversifying revenues and EBITDA. The forwarding business is becoming more important to Eimskip and we will continue to grow the business both organically and through further acquisitions.

The fourth quarter 2017 revenue was EUR 175.9 million, up by 25.2%, driven by new acquisitions and volume growth. EBITDA was EUR 11.9 million, up by 20.1% compared to the same period 2016. The financial results of November and December were below expectations, mainly due to reduction in exported volumes from Iceland and the Faroe Islands. Transported volume in the liner services was 4.5% up in the quarter. Forwarding services volume growth was 44.0%, with 25.2% coming from new group companies and 18.8% organic growth. Net earnings for the fourth quarter amounted to EUR 2.9 million and was up by EUR 1.0 million or 50.7% from the previous year.

The company has invested in the future of its container liner services and has reached its long-term goal of weekly service on all routes. The largest investment was in the weekly service on the North America and Europe route and the coastal route in Iceland. As from the end of November 2017, Eimskip strengthened its Trans-Atlantic services by offering new weekly services between Northern Europe and North America. This is a part of the company’s growth strategy and was achieved by adding the third 700 TEU vessel to the Green Line. Eimskip’s Trans-Atlantic volumes have been growing substantially in recent years and were up 30.9% in 2017. This volume growth, together with a new short-sea agreement with the international shipping company CMA CGM, plus additional volume from Eimskip’s current customers and new customers that rely on weekly services, created the foundation for adding the extra vessel. The CMA CGM agreement covers the area between Halifax, Nova Scotia and Portland, Maine in the US.

Over the last three years, we have added three vessels to the company’s container line, adding 35% capacity to the system. At the same time, the transported volume increased by 32%. We have now reached our goal to offer weekly services in the North Atlantic. The added frequency in the sailing system will increase revenue and attract new customers. Our focus in 2018 in the liner service is to increase sales and take out costs, resulting in higher margins. The company is putting an extra focus on improved processes by looking at the end-to-end booking processes to further increase efficiency and profitability.

The outlook for 2018 is positive for the liner and forwarding business. Good growth is in import and export volumes in Iceland in the first six weeks of this year and the outlook for the Faroe Islands and Norway are stable. Trans-Atlantic transport volume is expected to increase with the weekly services. Competition remains strong in the North Atlantic liner operation. The EBITDA forecast for the year 2018 is EUR 60 to 65 million.

The progress of building two new container vessels for the intended cooperation with Royal Arctic Line is on track and the expected delivery of the vessels is in the middle of 2019. The vessels will be the largest and most efficient in Eimskip’s vessel fleet. The Icelandic Competition Authority is evaluating the intended cooperation.

Eimskip has been working on lowering its carbon footprint in the recent years with good results. The accumulated reduction of the company’s carbon footprint in the years 2016 and 2017 was 12.3% compared to the base year 2015, calculated per ton of transported units. Eimskip’s aim is a 40% accumulated reduction in 2030, comparable with the aim of the European Union and Norway.

The Board of Directors proposes to the Annual General Meeting a dividend payment to shareholders in 2018 of ISK 6.80 per share, the same payment per share as last year. The proposed dividend payment totals ISK 1,269.1 million, the equivalent of approximately EUR 10.2 million, which represents about 61.0% of net earnings for the year 2017.”

Further information

  • Gylfi Sigfússon, President and CEO, tel.: +354 525 7202
  • Hilmar Pétur Valgardsson, CFO,  tel.: +354 525 7202
  • Erna Eiríksdóttir, Senior Manager of Investor Relations, tel.: +354 825 7220, email: investors@eimskip.is


2018 02 22 - PR Nasdaq - Financial Results 2017.pdf
Eimskip - Consolidated Financial Statements 2017.pdf